Midland Balance Sheets, at December 31 ($ In millions)

Assets: 2005 2006

Cash & Cash Equivalents 16,707 19,206 2.a
Restricted Cash 3,131 3,131 debt of amount
Notes Receivable 18,689 19,681
Inventory 6,338 7,286 2.b
Prepaid Expenses 2,218 2,226 Cost of debt
Total Current Assets 47,083 51,530

2.c
Investments & Advances 30,140 34,205 D/V
Net Property, Plant & Equip 156,630 167,350 E/V
Other Assets 10,818 9,294
Total Assets 244,671 262,379 2.d
Capital structure target
Liabilities & Owners' Equity Targets were set based
Accounts Payable & Accrued Liabilities 24,562 26,576
Current Portion of Long-Term Debt 26,534 20,767 2.e
Taxes Payble 5,723 5,462 Midland has several de
Total Current Liabilites 56,819 52,805 Midland's beta
Market risk premium
Long-Term Debt 82,414 81,078 Equity market risk prem
Post Retirement Benefit Obligations 6,950 9,473 Equity Value
Accured Liabilites 4,375 4,839
Deferred Taxes 14,197 14,179
Other Long-Term Liabilities 2,423 2,725

Total Shareholders' Equity 77,493 97,280

Total Liabilites & Owner's Equity 244,671 262,379
debt of amount 165,099

Cost of debt

1.70
0.32

Capital structure target ratio

Targets were set based on considerations involving each division's annual operating cas flow and the collateral value

Midland has several devisions such as E&P, R&M, and petrochemicals therefore it should use target ratio
Midland's beta 1.25
Market risk premium 5.00%
Equity market risk premium
Equity Value
ow and the collateral value of its identifiable assets.

use target ratio